A.M. Best Special Report: Life/Health M&A Activity Driven by New Markets and Consolidation

OLDWICK, N.J.--()--Global merger and acquisition (M&A) activity in the life/ health (L/H) industry during the first six months of 2014 is on track, in terms of total dollar value, to be consistent with full-year 2013 reported activity. According to A.M. Best research, 14 L/H deals were announced globally in the first half of 2014, with a total disclosed value of approximately USD 10.6 billion, a little more than half of the approximately USD 18 billion in activity for all of 2013.

Much of the recent activity in the L/H segment continues to reflect: industry consolidation, some of which is larger players looking to gain additional scale, as was the case of Dai-ichi of Japan’s acquisition of Protective Life; veteran acquirers entering into new markets as a means to diversify globally; and the influx of new participants into existing markets primarily backed by private-equity organizations.

Factors driving the consolidation of the industry include:

  • The impact of the sustained period of low interest rates;
  • Regulatory challenges causing insurers to focus on less capital-intensive and market sensitive products; and
  • Lower expected margins in certain lines of business.

From the sell side, much of the M&A activity has been driven by the desire to “de-risk” balance sheets and focus on core competencies. Product mix has gradually shifted toward offerings that are less capital intensive and have less generous benefits.

To access a copy of this special report, please visit http://www3.ambest.com/bestweek/purchase.asp?record_code=227389&AltSrc=26

A.M. Best Company is the world's oldest and most authoritative insurance rating and information source. For more information, visit www.ambest.com.

Copyright © 2014 by A.M. Best Company, Inc. ALL RIGHTS RESERVED.

Contacts

A.M. Best
Mariza Costa, 908-439-2200, ext. 5308
Financial Analyst
mariza.costa@ambest.com
or
Christopher Sharkey, 908-439-2200, ext. 5159
Manager, Public Relations
christopher.sharkey@ambest.com
or
Ken Johnson, 908-439-2200, ext. 5056
Assistant Vice President, Industry Research
ken.johnson@ambest.com
or
Jim Peavy, 908-439-2200, ext. 5644
Assistant Vice President, Public Relations
james.peavy@ambest.com

Sharing

Contacts

A.M. Best
Mariza Costa, 908-439-2200, ext. 5308
Financial Analyst
mariza.costa@ambest.com
or
Christopher Sharkey, 908-439-2200, ext. 5159
Manager, Public Relations
christopher.sharkey@ambest.com
or
Ken Johnson, 908-439-2200, ext. 5056
Assistant Vice President, Industry Research
ken.johnson@ambest.com
or
Jim Peavy, 908-439-2200, ext. 5644
Assistant Vice President, Public Relations
james.peavy@ambest.com